Standard Life UK Smaller Companies - Downgraded

The Standard Life UK Smaller Companies Fund (unit trust) was previously rated five stars by Bestinvest and was then downgraded to a two-star hold in 2011 after it was soft closed to new investors to limit growth in assets under management. However assets under management for the fund remain high. We believe they are likely to continue to compromise the manager’s ability to implement his investment style efficiently and, in doing so, his ability to deliver outperformance on a par with the past. We have higher conviction in alternative mandates that we believe are less constrained in this respect and have downgraded our rating to a 1 star.

The UK Smaller Companies investment trust also managed by Nimmo has historically outperformed his unit trust, although this distinction has become less pronounced over the last three years. The trust pursues an identical investment strategy and has a reasonably high degree of overlap with his open ended fund, consequently we would also expect it to be subject to the same challenges going forward. The trust is currently trading marginally below its rolling one-year discount to NAV, consequently we have downgraded our rating to a two star.

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.

Current or past yield figures provided should not be considered a reliable indicator of future performance.

Date

02/07/2015

Fund rating

The value of your investment can go down as well as up, and you can get back less than you originally invested.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.